Kansas Updates

Recently Governor Kelly signed Senate Bill No. 241 into law, amending the Kansas Restraint of Trade Act. This amendment clarifies which business contracts are not considered an unreasonable restraint of trade or against public welfare. 

 

Key Changes:

 

• Non-solicitation agreements: The law creates presumptions of enforceability for employee and customer non-solicitation covenants meeting specific requirements, including a two year duration limit, where previously the Act's coverage of such provisions was unclear. 
• Mandatory reformation: If a covenant is deemed overbroad or unenforceable, Kansas courts are required to modify and enforce the covenant as modified. 
• Effective date: The amended Act takes effect on July 1, 2025. 
• "Pro-business" law: The Kansas Chamber has praised the law as "pro-business," enhancing employers' ability to protect workforce stability and client relationships. 

 

Existing Regulations:

 

• Kansas courts already uphold protective covenants that are reasonable and not against public welfare.
• Courts assess reasonableness by considering factors like: protecting legitimate business interests, burden on the employee, public welfare impact, and reasonable duration and geographic scope.
• The "reasonableness test" will continue to apply to protective covenants not specifically covered by the new law's presumptions, including non-compete agreements.
• The new law mandates flexible enforcement by courts for agreements falling within the specific limitations.

 

For questions on business contracts and restraint of trade reach out to your legal counsel as needed.